Business Credit Line – A Flexible Buffer for Cash Flow Waves
A business credit line is like a credit card for your company: you're granted a credit limit (e.g., €50,000), from which you can withdraw money as needed and repay at your own pace. Through us, you can apply for a credit line up to 500,000 euros.
Why choose a credit line?
- •Pay only for usage: Interest accrues only on the withdrawn amount, not the entire limit.
- •Safety net: Acts as a buffer when customers pay slowly or unexpected expenses arise.
But is a credit line the right solution? If your limit is constantly maxed out, it becomes expensive. In that case, a fixed business loan is often more affordable. If you want to free up money from receivables, invoice financing might be more efficient.
Let Trusty find the best option. Our AI CFO calculates whether a flexible credit line is the most profitable safety net for you, or if you'd save money with a different solution.
Trusty's quick analysis: When does a credit line work?
A business credit line is at its best as a short-term flexibility provider, not as long-term investment capital.
Choose a credit line when:
- •Cash flow fluctuates: Seasonal variations or gaps between projects require balancing.
- •You need speed: An unexpected order requires immediate material purchases.
- •You want insurance: You're getting a credit line "for a rainy day" when your cash position is healthy.
Consider another option when:
- •You need financing continuously for a long time (consider a business loan).
- •You're buying equipment or vehicles (consider leasing).
- •You need financing for an investment over €500,000 (consider a secured business loan).
Traditional banks or finance companies?
We compare both so you get the best terms.
Traditional banks:
- Often slightly lower interest rates, but require stricter collateral and processing times are longer (1–2 weeks).
- Suitable for established companies.
Finance companies:
- Offer credit lines for use very quickly (decision in 1–3 days).
- Flexible with collateral, but interest rates are determined based on company-specific risk.
Frequently asked questions about business credit lines
(Click on a question to see the answer)
How much do I pay if I don't use the credit line?
Usually very little. Most agreements have a small annual or monthly fee for maintaining the credit line, but you only pay actual interest on the amount that is withdrawn. An unused credit line is therefore an affordable insurance.
Do I need collateral?
Not necessarily. For smaller credit lines (under €50,000), the entrepreneur's personal guarantee is often sufficient. For larger amounts (up to hundreds of thousands), real collateral improves the terms and is often a prerequisite for approval.
How does a credit line differ from a business loan?
A business loan is a lump sum with a fixed payment schedule. A credit line is an ongoing credit that you withdraw and repay flexibly. If the need is permanent, a loan is usually cheaper. If the need varies, a credit line is better.
How large a credit line can I get?
The credit line amount depends on the company's turnover and payment capacity. Typically, the credit line is about one month's turnover, but through us you can apply for a credit line up to 500,000 euros.